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Jim Gadwood Quoted on How Taxpayers Can Leverage IRS Appeals During the Collection Process in Financial Advisor

"How Clients Can Take Advantage of the IRS Tax Appeals Process"

Financial Advisor Magazine

Financial Advisor quoted Jim Gadwood in a recent article addressing how taxpayers can use the Internal Revenue Service (IRS) Independent Office of Appeals (Appeals) to resolve large federal tax debt. Gadwood explained that there generally are three ways to access Appeals during the collection process: collection due process (CDP); equivalent hearing; and the collection appeals program (CAP). Each comes with different procedures and advantages. "CDP is the most powerful and offers a taxpayer the most options," Gadwood said. "At a CDP hearing, a taxpayer can raise spousal defenses, challenge the appropriateness of the collection action and propose collection alternatives such as an installment agreement or an offer in compromise." 

"A taxpayer can also challenge the existence or amount of the underlying tax liability if the taxpayer didn't previously have an opportunity to do so," Gadwood added. "If the taxpayer disagrees with the appeals determination at the end of the CDP hearing, [he or she] can petition the U.S. Tax Court." A taxpayer who fails to request a CDP hearing by the deadline may still request an equivalent hearing, raising "the same issues as in a CDP, subject to the same limitations. But a taxpayer that requests an equivalent hearing may not challenge the appeals determination," Gadwood said. CAP is available earlier in the collection process than CDP or an equivalent hearing; a taxpayer can use CAP to challenge collection but "cannot use CAP to challenge the underlying tax liability, and there is no right to challenge the appeals determination."